Patients are becoming a larger source of financial exposure for health systems, pushing CFOs and revenue cycle leaders to rethink where affordability fits in their broader financial strategy.
An Oct. 26 report from Cedar and the Health Management Academy found patient responsibility is rising fastest on larger hospital balances, even as many health systems remain better equipped to help uninsured patients than insured patients facing thousands of dollars in deductibles and coinsurance.
The report analyzed Cedar billing data and examined affordability strategies at five health systems through interviews with CFOs, revenue cycle leaders and operational staff. The findings add another dimension to an affordability problem health system finance leaders have been flagging throughout 2026.
Seven things to know:
1. Patients now account for nearly half of large hospital balances. Out-of-pocket responsibility represented 49.3% of dollars in large, slow-to-resolve balances in the first quarter of 2026, up from 37.5% a year earlier. The report defined larger bills as roughly $200 or more. The increase was concentrated on larger balances. Patient responsibility on smaller bills was essentially unchanged, suggesting financial exposure is growing most where patients may have the greatest difficulty absorbing it.
2. About $28 million in responsibility shifted from insurers to patients. Total billings in the analyzed group increased by $16 million to $323 million, while the patient portion increased by $44 million to $159 million. Researchers said the difference amounts to roughly $28 million shifting from insurers to patients on essentially the same volume of care. They pointed to high-deductible health plans and coinsurance as key drivers, since patient liability can rise alongside the overall cost of a service rather than remaining at a fixed copay.
3. The underinsured are emerging as a major gap. Health systems generally have established pathways for uninsured patients and lower-income patients who qualify for financial assistance. The harder group is insured patients whose incomes exceed traditional assistance thresholds but who still cannot reasonably absorb deductibles, coinsurance and other large out-of-pocket costs, according to the report. That group can fall between existing pathways: They have coverage, so they may not qualify for traditional charity programs, but their coverage can still leave them responsible for thousands of dollars.
4. Some systems are expanding assistance rather than chasing balances unlikely to be collected. One system studied increased its charity care threshold from 225% to 350% of the federal poverty level in early 2026, shifting an estimated $100 million from bad debt to charity care because leaders determined many patients within that income range were unlikely to pay regardless. The health system also helped eligible self-pay patients enroll in marketplace coverage and supported premium payments. About 350 patients enrolled during the first year, compared with an initial projection of 200 to 225. The effort generated roughly $10 million to $12 million in health plan payments that otherwise would have remained self-pay balances.
5. More flexible payment options are producing financial returns. One health system reported its billing collection rate increased from about 50% to 70% over five years after deploying a digital patient payment platform. Self-service accounted for 81% of collections, while about $33 million had been collected through payment plans. Another system reported an $18.7 million revenue lift from increased collections and reduced bad debt after introducing personalized digital billing and payment options. The systems showing stronger results generally moved away from a one-size-fits-all approach. Instead, payment options and outreach were increasingly tailored to factors such as balance size, payment history, financial circumstances and likelihood to pay.
6. Technology is not the biggest obstacle. Coordination is. The report found health systems generally have access to many of the tools needed to address affordability. The more difficult problem is connecting them across the patient journey. Financial assistance, price estimates, eligibility verification, payment plans and collections can sit with different teams, reporting structures and technology platforms. That fragmentation can leave no single group accountable for what happens financially from scheduling through final payment.
7. Health systems are moving affordability conversations earlier. The systems furthest along are shifting from asking how to collect a balance after care to determining earlier whether a patient can reasonably afford it, according to the report. Strategies include coverage discovery, presumptive charity screening, more accurate pre-service estimates and earlier payment-plan enrollment. Some systems are also tailoring post-service outreach based on a patient’s circumstances rather than applying the same collection strategy across accounts. Moving those conversations upstream can also help health systems intervene before a balance becomes bad debt. But the report found gaps in payer data, estimate accuracy and organizational ownership still make it difficult to determine patient responsibility early enough to act.
“This is the moment patients are least equipped to handle, and it’s exactly where most billing systems still fail them,” Florian Otto, CEO and co-founder of Cedar, said in a news release. “We built our platform to meet patients where they are, with coverage screening, tailored financial assistance and payment options built around how real people actually pay, not how insurance claims settle. When systems put the right options in front of patients, people use them. The next step is reaching patients with those options earlier, before a bill ever arrives, so a growing balance never becomes a reason someone delays care.”
Click here to access the report.
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